Washington State Senate Bill 5463 moves toward a vote

On March 21, the recently introduced Washington State Senate Bill 5463 was heard in the House Labor and Workplace Standards Committee. The bill now moves to the House and, if approved without changes, will go to the Governor’s office for signature.

If passed, the law will be effective Jan. 1, 2026, and will have a major impact on employers and administrators. It will expand the duty of “Good Faith and Fair Dealing” to all self-insured and third-party administrators and impose enhanced penalties and a three-strike rule that could decertify employers from self-insurance.

Sedgwick continues to work with the Washington Self-Insurers Association (WSIA) to oppose this legislation, You can find contact information for members of the Senate here and details of WSIA’s opposition here, including some sample messaging and an email that was sent to the Senate before the bill moved to the House.

Potential impacts of Senate Bill 5463

Penalties
If good faith and fair dealing has been violated, penalties will include:

• One to 52 times the average weekly wage, depending on the severity of the violation
• $3,000 or 75% of the amount due for unreasonable delay or refusal to pay benefits
• $3,000 for failure to comply with a rule or other provision pertaining to workers’ compensation

Decertification
The Department of Labor and Industries will withdraw an employer’s self-insured certification if they violate the duty of good faith and fair dealing three times within a three-year period, excluding minor or inadvertent errors or delays.

Sedgwick regularly monitors and reports on disability, leave and workers’ compensation legislation impacting our customers. Click here to see all recent legislative updates.